Uno Minda: Early entrant in EV biz is now a market leader

Gurugram-based Uno Minda has one of the largest ancillary product portfolios for the automotive industry with products like switches, lighting, acoustics, alloy wheels, die-casting, and seating among others. With the inclusion of orders finalised in the first quarter (April-June) of this fiscal year, the current order book for Uno Minda stands at more than Rs 2,500 crore.

Out of this, the order size for electric vehicle (EV)-specific components is over Rs 1,350 crore, notably, higher than twice the EV orders the company received last year. Sunil Bohra, the Group CFO and CEO of Uno Minda said the company received new orders during the first quarter (April-June) which had an annual peak revenue of around Rs 600 crore. “New orders from EV OEMs continue to swell with order wins for EV specific components, as well as existing products. The total annual peak revenues from these orders stand at Rs 2,500 crore plus,” Bohra said.

The diversified manufacturer has further solidified its position in the e2W and e3W market through a joint venture with FRIWO AG, Germany. This partnership will not only boost the manufacturing capabilities of Uno Minda but also establish it as the number one global supplier of key EV components such as battery packs, BMS, motor controllers, and DC-DC converters.

New plants commissioned for EV products
“Our new EV systems plant at Farukhnagar for our joint venture with FRIWO had started with a few assembly lines. It will gradually increase the number of clients with standard operating procedures (SOP) for more orders in the second half of FY 2023-24,” said Bohra.

This new plant will manufacture On-Board Charger, Off-board charger, Motor Control Units, DCDC converters, Battery Management Systems, and many more products catering to EV 2-wheelers and 3-wheelers. Supplies from this plant have already started and are expected to further ramp-up in coming quarters. In August 2023, Uno Minda commissioned its second new EV systems plant under its subsidiary Uno Minda Buehler Motor Private Limited (UMBM) in Bawal, Haryana. The plant will manufacture traction motors/BLDC motors for EV two wheelers and three wheelers. UMBM has already received orders from OEMs and is expected to start supplies by Q3 FY24.

Performance aspirations
The company's management aspires to reach about 12 percent EBITDA margins in the medium term on the back of some projects nearing completion and significant investments in R&D. In the short term, they opine that a drag on margins is possible due to multiple project expansions underway with higher fixed costs and lower operating leverage. However, once production stabilises at new plants in the long run, operating leverage is expected to have a positive impact on margins. Also, lower depreciation and interest costs in the future will improve the bottom line.

Over the period FY12-23, Uno Minda has grown its revenue at 22.8 percent CAGR in a cyclical industry. "This is testimony to its growth potential going ahead. We expect the company to be one of the biggest beneficiaries as the auto industry transitions from an ICE dominant portfolio to an EV led one,” brokerage firm Ventura said in its report.